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What are the effects of macroprudential policies on macroeconomic performance?

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Listed:
  • Codruta Boar
  • Leonardo Gambacorta
  • Giovanni Lombardo
  • Luiz Awazu Pereira da Silva

Abstract

Macroprudential policies are designed to make financial crises less likely or less severe. At the same time, they might also curb output growth by affecting credit supply and investment. Using data for a panel of 64 advanced and emerging market economies, this special feature investigates empirically the effects of macroprudential policies on long-run economic performance. We find that countries that more frequently use macroprudential tools, other things being equal, experience stronger and less volatile GDP growth. These effects are influenced by each economy’s openness and financial development. Finally, we find that non-systematic macroprudential interventions tend to be detrimental to growth.

Suggested Citation

  • Codruta Boar & Leonardo Gambacorta & Giovanni Lombardo & Luiz Awazu Pereira da Silva, 2017. "What are the effects of macroprudential policies on macroeconomic performance?," BIS Quarterly Review, Bank for International Settlements, September.
    • Handle: RePEc:bis:bisqtr:1709g
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    More about this item

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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